Customers The Company currently serves customers at 38 sites and provides underground drilling services domestically and surface drilling services both to domestic and international customers. The Company currently has operations and customers in Qu ? ebec, Ontario, the United States, Mexico, Guyana and Suriname. Drilling services contracts are typically awarded following a tender process. P rices are typically quoted on a per metre (or foot) basis and, in certain circumstances, a day rate per drilling rig. Customers commonly pay for costs such as gas, food and lodging for employees and the cost to set up the drilling operations and to demobilize (or take it down and clean up the operation). The Company has strong customer relationships, having serviced some of its clients for over 20 years and many of these long term customers will award drilling contracts to the Company without engaging in a competitive bidding process. The Company’s underground drilling customers are typically involved in the exploration or exploitation of gold and base metals. These clients are major mining companies with which the Company has had long-standing relationships. The costs associated with mobilization and demobilization of a new drilling contractor as well as the disruption to the customer’s operation places the Company in a favourable position when bidding to retain an underground contract for an existing customer. The Company has served most of its customers for many years, and some for over two decades. The Company’s revenues are secured by both short and longer-term contracts (two years), allowing management to periodically renegotiate pricing to reflect market conditions. The Company’s surface drilling clients are a mix of intermediate and major mining companies as well as junior mining companies exploring for gold and base metals. F or the twelve months ended March 31, 2008 (on a pro forma basis) approximately 63% of its revenue from drilling operations was derived from more established intermediate and major mining companies and approximately 37% of the Company’s revenue from drilling operations was generated from services provided to junior mining companies. Due to strong market conditions and its established reputation in the industry, the Company continues to attract new clients. Orbit Garant’s revenue base is widely distributed across its list of customers, with no single project accounting for more than 10% and no single customer accounting for more than 15% of revenue for the twelve months ended March 31, 2008 (on a pro forma basis). The Company insures most of its accounts receivable from both domestic and international junior mining company clients with the EDC. The policy with the EDC provides that the Company will receive 90% of any insured account receivable that is not paid. Capital Expenditures The Company founded Soudure R oyale and X-Spec to ensure that it has the people and infrastructure in place to provide it with high quality machinery and parts that are engineered to meet the demands of its clients. In order to provide clients with superior service, the Company remains committed to investing in state-of-the-art equipment specifically tailored to its customers’ needs. The Company incurred approximately $2.6 million and $5.5 million, respectively in capital expenditures in the twelve month periods ended March 31, 2007 and 2008 (each on a pro forma basis). New drilling equipment was the largest single capital expenditure item. The Company is paid based upon the number of metres drilled and therefore increasing its drilling capacity is an important requirement for future growth. During the current fiscal year management committed to spend approximately $2.3 million to manufacture 11 new surface and underground drills, ten of which were received and put into operation in the first nine months of fiscal 2008. The Board of Directors has approved the fiscal 2009 capital budget of $5.6 million. The capital budget plans for the manufacture of 18 new drills and supporting ground equipment. Competition The mineral drilling services industry is comprised of a number of small regional competitors as well as a limited number of multi-national corporations that include Boart L ongyear Limited, Energold Drilling Corp., F oraco International S.A., L ayne Christensen Company and Major Drilling Group International Inc. The 36